Memorandum submitted by Simon Bowers,
I thought it might be of assistance to the committee
to note some research The Guardian carried out on the value
for money being delivered by the National Programme for IT (NPfIT)
between November 2006 and January this year.
I canvassed a small number of significant NHS
suppliers and long-standing industry experts on how much it would
cost, outside the NPfIT, to supply patient administration systems
(PASs) to the standard specified by the NPfIT (a) for an acute
hospital trust, and (b) for a community or mental health trust.
Most gave their opinion on condition of anonymity. One exception
was Stephen Critchlow, executive chairman of software group Ascribe
All agreed that the a conservative estimate
for an acute hospital trust system was £2 million, while
a conservative estimate for a mental health/community system was
less that £250,000.
I put these figures to NHS Connecting for Health.
In reply, a statement was sent to me saying: "The figures
you quote for costs of systems are not comparable with what Local
Service Providers deliver."
All of the above information went into an article
published on 22 January 2007.
22 Jan 2007: The GuardianPage 21(637
Financial: NHS pounds 6bn IT system poor value,
say experts: Schemes "costing four times going rate":
Health officials reject claims of overpayments
By: Simon Bowers
Leading healthcare IT experts have warned that
the NHS's troubled pounds 6.2 billion system upgrade is costing
taxpayers substantially more than it should. They claim the same
functions could be delivered for considerably less outside of
the national programme for IT, dogged by delays and software setbacks.
Stephen Critchlow, executive chairman of software
group Ascribe, said he "could not see where value for money
is coming from". There was evidence, he added, to suggest
the NPfIT was installing and running systems for several times
the going rate.
Phil Sissons, a former executive at the software
group Torexnow part of iSoftand an ex-consultant
to the NPfIT, said: "Publicity from the national programme
was that they got some good deals because of the buying power
of the NHS.
"But I don't believe they reduced the cost
at all. There are multiple margins being added to the process
each time there is an extra layer of management or another company
Doug Pollock, managing director of software
supplier Cambio, who has also worked within the national programme,
said these multiple margins were sometimes "scandalous".
From the outset, NHS bosses promised the centrally
organised 10-year IT upgrade programmecovering hospital
trusts and GP practices across Englandwould be pounds 3.6
billion cheaper than the cost of upgrading systems on a piecemeal
However, the first three years have proved troublesome,
with deliveries of patient administration systems (PASs) to acute,
primary care, community and mental health trusts falling far short
of targetsand, most importantly, without delivering the
promised clinical functionality. Cost savings, NHS bosses still
insist, remain on track.
Meanwhile, the NHS's head of IT, Richard Granger,
has been busy compiling a catalogue of alternative suppliers.
Industry insiders believe they could help the troubled projectthe
largest civil IT project in the worldevolve from a national
into a local programme. At the same time, the Department of Health
continues to make multimillion pound payments to its five lead
regional contractors, known as local service providers (LSPs).
At the end of March last year, NHS fig ures
showed US consultancy firm CSCLSP for the north-west regionhad
only installed PASs at 58 community or mental health trusts and
at eight acute trusts.
Independent suppliers canvassed by the Guardianincluding
Ascribe and others who asked not to be namedsaid the going
rate, outside NPfIT, for providing a comparable acute trust PAS
was about pounds 2m, while community or mental health systems
could be delivered for less than pounds 250,000. By the end of
March, however, the DoH had paid CSC pounds 119 millionalmost
four times what it would have cost to have similar systems delivered
outside the NPfIT.
An NHS spokesman told the Guardian: "We
are not overpaying CSC. The NHS pays LSP suppliers in accordance
with contracted schedules. The figures you quote for costs of
systems are not comparable with what LSPs deliver."
The spokesman pointed out that "significant
infrastructure", which is yet to be fully utilised, had also
been delivered. This is believed to be a reference to computer
servers housed remotely at central data centres. Last year, the
NHS's largest-ever computer blackout was traced back to the Maidstone
data centre. It was blamed for bringing down PAS systems at about
80 trusts for up to four days. A back-up system failed to function.
NHS bosses have repeatedly insisted tough NPfIT
contracts mean taxpayers will never be left paying the cost for
work that had not been delivered to standard.
No detailed figures for DoH spending on NPfIT
are available since last March, but a number of sources within
LSPs have privately confirmed multimillion-pound payments have
continued to flow.
A number of rogue acute trusts have become so
frustrated with the NPfIT that they have opted out, forgoing central
government funding in favour of selecting their own IT suppliers.